No Dividends Were Declared in 2015

question 175

Multiple Choice

No dividends were declared in 2015.During 2016,the total dividends declared amount to $10,000.There are 4,000 shares of $1 cumulative preferred shares outstanding and 10,000 common shares outstanding.The total amount of dividends payable to each class of shares in 2016 amounts to:

• A) $5,500 to preferred, $4,500 to common
• B) $3,000 to preferred, $7,000 to common
• C) $8,000 to preferred, $2,000 to common
• D) $10,000 to preferred, $0 to common

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Definitions:

Downstream Costs

Expenses incurred after the manufacturing process, such as distribution and marketing.

Work in Process Inventory

Items or goods that are partially completed in the production process but are not yet finished products.

Manufacturing Costs

The expenses involved in producing goods, including labor, materials, and overhead.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including direct materials, direct labor, and manufacturing overhead.